In total, the HKMA has spent HK$116.61 billion to buy US$15 billion worth of US dollars to weaken the local currency, which in recent days had hit the strong end of its trading band. At noon on Tuesday, the local currency traded at HK$7.7504 per US dollar.
Hong Kong’s currency peg with the US dollar has been in place since 1983. Since 2005, the authority has intervened to keep the exchange rate within a trading band of HK$7.75 to HK$7.85 per US dollar.
On Saturday, the HKMA said the local currency’s recent strength was due in large part to stock-investment activities and the appreciation of regional currencies against the US dollar.
“The HKMA interventions are related to the capital inflows by international investors who plan to invest in the many coming popular initial public offerings such as Contemporary Amperex Technology (CATL),” said Tom Chan Pak-lam, chairman of the Hong Kong Institute of Securities Dealers.
CATL, the world’s largest producer of electric-vehicle batteries, is expected to kick off its Hong Kong initial public offering (IPO) process next week in an effort to raise up to US$5 billion. That would be the largest share sale in the city since Kuaishou Technology’s US$6.2 billion IPO in January 2021, according to analysts’ estimates.
